Washington [US]: India has reiterated its choice of importing oil from countries like Russia after OPEC Plus, a consortium of oil-producing nations led by Russia and Saudi Arabia, announced a slash in oil production by two million barrels per day.
While talking to reporters in Washington DC during his ongoing US visit, Union Minister of Petroleum and Natural Gas Hardeep Singh Puri on Saturday touched on several topics including how India will balance OPEC Plus oil production cut, diversification of energy – equity infusion, bio-fuel blending and green hydrogen.
With rising global energy requirements, the OPEC production cut is likely to impact countries like India, the third largest oil importer.
Speaking on the topic of balancing the imports from OPEC Plus countries as well as from the US, which is also a oil exporting country, Puri said “If you are clear about your policy, which means you believe in energy security, energy affordability you will buy from wherever you have to. Our energy purchases from sources hitherto unheard of, we are in discussion with them.”
Answering how India will negotiate the tightrope of expectations, he told ANI, “It’s not a tight rope, I don’t look at – We will also acquire assets outside wherever – I mean in recent months- we did USD 1.6 billion equity infusion which BPCL has done in Brazil. We are looking at assets in Africa.”
Puri explained that oil exporting countries need buyers as they have to sell their products in the market.
“Sometimes when you are looking at it in a journalistic manner, you would say that producers are holding all the cards. I disagree with that; I think the person or country with a large market also has a huge role to play. I am giving you a hypothetical example – If we decide to limit consumption, no matter what you produce, you will have to find a place to sell it too and I can tell you that in the last year or so, I have had my oil companies tell me that we can raise it from here, but there are traditional suppliers, this is a discussion which will go on,” Puri said in response to a question by ANI.
“Much of the trade incidentally takes place in a manner which is not properly understood outside. It’s not that – you have some fuels which have high density, some are lighter fuels – I don’t want to get into that discussion – it may originate somewhere – we own assets outside, the product of those assets does not come to India, it goes in, it’s sold in the swap market etc,” he added.
This week’s OPEC Plus announcement on oil production cut will likely have a cascading impact on geopolitical shifts amid the Russia-Ukraine crisis.
“Oil and energy have been traded for years. Governments in particular situations will react to geopolitical events. At the end of the day all governments are committed to issues of energy provisions; that is security and affordability,” said Puri.
Meanwhile, an intense pressure campaign by the US to dissuade its Arab allies seemingly fell on deaf ears. Russia is already pumping below its OPEC+ ceiling, and the bulk of the cuts will be made by Gulf producers.
Speaking about the conflict and Indian diversification, Union minister Puri said, “I don’t see any conflict. There are countries in OPEC that sell to us. They’ve never turned around and told us that they don’t want to sell to us. If you don’t sell to India and China, there are not many big markets left, even Europe collectively. Many of these are matured markets in energy. They don’t utilize crude oil – some of them have gone into nuclear energy, and others are going into biofuels. I also want to share with you some of the advances which India has made – biofuel blending, when I was Ambassador to Brazil, we tried very hard, the central government tried to introduce 5 per cent ethanol blending in 15 of our States and Union Territories, we couldn’t get it done.”
Puri further stated that the India had taken a giant leap in bio-fuel blending after Prime Minister Narendra Modi assumed power in 2014.
“In 2014, when Prime Minister Narendra Modi assumed office, our bio-fuel blending was 1.4 per cent, today we have already reached 10.5 per cent of blending. We have a target of 20 per cent blending by 2030. We have just brought it forward to 2024-2025,” said Puri.
He also gave examples of green Hydrogen and how India is providing opportunities for oil exploring companies.
“Green Hydrogen – We have Indian companies selling green ammonia to Germany – the world is moving at different fronts – exploration and production in India will shoot up. I have always said that we have neglected to the point, I even use words like ‘criminal neglect.’ We have 3.5 million square kilometres of sedimentary basin, and one million square kilometres of that sedimentary basin was called a ‘no go area’, just now a few months ago, 99.5 per cent of that ‘no go area’ has been cleaned up which means for an investor are happy to come and explore. There are not hundreds of players in the energy sector, five to six big companies, they are all interested, they are either forming joint ventures, just to come (to India),” said Puri. (ANI)